Cost to income ratio

Operating expenses divided by operating income, meaning net interest income plus fees. It measures how efficiently a bank converts revenue into profit.

Spending ₹1,080 crore to generate ₹2,400 crore of operating income puts a bank at 45%.

Below 45% is efficient for an Indian bank and above 55% is a problem. Branch networks, technology spending and staff costs are the drivers, and a bank investing heavily in distribution will run a worse ratio for several years before the branches mature.

To tell investment from inefficiency, look at what the spending bought.